The next fiscal battle: The debt ceiling

WASHINGTON -- While you were partying on New Year's Eve, the U.S. hit its debt ceiling -- setting up the next big budget battle in the first two months of 2013.

In a letter to Congress on Monday, Treasury Secretary Timothy Geithner said he has begun a "debt issuance suspension period," using "extraordinary" borrowing measures to make sure the government avoids exceeding its debt limit of $16.394 trillion.

But the debt issuance suspension period would last only through Feb. 28 -- and congressional action would be needed in the interim to increase the debt ceiling.

President Obama and House Republicans clashed over the debt limit in the summer of 2011, leading to a near-default on the government's obligations and a downgrade of the nation's credit rating.

Expect more arguing about taxes, spending cuts, and debt in the weeks ahead.

CNNMoney reports:

"By taking those steps, Treasury can buy about $200 billion of headroom. That normally can cover about two months' worth of borrowing, although continuing uncertainty about tax rates and spending make it hard to determine precisely how long the extraordinary measures will last.

"The bottom line: Congress will have to raise the debt ceiling soon -- as soon as late February.

"And that sets the stage for yet another fight on Capitol Hill, where some Republican lawmakers view the debt limit as leverage in negotiations with President Obama over spending cuts and reforms to Medicare and Social Security.